An important U.S.-Cuba business conference, critical to opening markets for American farmers, took place in and around Havana, Cuba, recently.
Now that U.S. exporters are allowed to use USDA programs to promote exports to Cuba, the U.S. Agriculture Coalition for Cuba (USACC) and FocusCuba sponsored the event in an effort to assist American farmers in understanding all aspects of the demand for food in Cuba and how to best use FMA/MAP grant funds. Americans attending the event represented many others from Arkansas, Illinois, Kansas, Texas, New Jersey, Delaware and Washington, D.C.
The American group visited markets to learn how Cubans purchase food through state rationing and a heavily subsided distribution system. They also met with a Cuban farm cooperative that elects its leadership and votes as a democracy on important decisions.
Farm co-ops work with ACOPIO, a state agency of the Cuban government that purchases the farmers' agricultural products for a fixed and guaranteed price. The group learned that food production in Cuba has declined this year, mostly because of a lack of seed and necessary agricultural equipment. Other problems affect the ultimate availability of crops, such as post-harvest losses resulting from a lack of quality storage facilities and spoilage.
During a visit with officials from Alimport, the Cuban governmental agency responsible for food imports from the U.S., the group learned that 2019 imports from the U.S. will be about the same as that of 2018--about $220 million.
However, the projections for 2020 are expected to be lower. The reasoning appears to be framed around concerns about the current political environment and tension between the two countries. Amid these concerns, Alimport continued to express great interest in purchasing more food from U.S. farmers.
Reasons for such interest centers on three critical points: 1. Quality of food from U.S. farmers is better than most other sources; 2. Speed of delivery, ensuring no shrinkage caused by delays (U.S. products can arrive in Cuba in 10-14 days, while food from Vietnam and China take a minimum of 40-50 days, often arriving inedible because of spoilage; 3. Because of proximity to Cuba, shipping costs are dramatically less from the U.S. than from Asia, thus lowering the expense to Cubans.
Presentations were made by several Cuban officials and other executives responsible for importing and even setting agriculture policy. The group learned the current hardships on paying cash in advance for the soy and chicken currently being purchased from U.S. sources. Because U.S. law requires payment in U.S. dollars, which don't exist in Cuba, the Cubans must send euros to Europe to have the money converted to U.S. dollars, then forwarded back to the U.S.
Money exchange of this sort is cumbersome and expensive, ultimately forcing Cubans to pay more money for the food. Allowing U.S. farmers to sell to the Cubans on credit and then allow standard bank transfers would alleviate this costly exercise.
One of the organizers of the conference is Paul Johnson, chair of USACC, an organization that supports improved agriculture trade relations with the island. "American farmers and ranchers will tell you that they need more markets for their products. Well, Cuba represents one such market. We are here in Cuba this week to underscore that message and bring awareness to members of the U.S. Congress as to what is available for the American ag industry."
In recent years, many new Cuban governmental reforms have affected the country's agriculture industry. Those who choose to farm in Cuba are offered 26.84 hectares (67 acres) of land on a lease basis. If livestock production is added, they are given an additional 26.80 hectares (for a total of 134 acres).
Further, the government provides the farmers with seed, fertilizer, tools and machinery necessary to farm the land at no cost. The farmers are allowed to retain everything but the land. The farmers have formed 2,386 cooperatives made up of families throughout the country. About 450,000 people work in the three types of cooperatives in Cuba today.
An estimated 70 percent of agriculture products grown on rural farms in Cuba are organic and free of all chemicals. The country currently produces enough rice to fulfill about 50 percent of its demands. It also produces 90 percent of the tropical fruit consumed in Cuba, including avocados and papaya, and could produce more for export to the U.S. if there was a market and normalized trade relations, allowing Cuba to purchase more goods from U.S. farmers and ranchers, including rice, soybeans, corn and wheat.
Annually, Cuba produces and sells about 4 million premium cigars (brands like Cohiba, Montecristo, and Partagas) which accounts for about 70 percent of all premium cigars sold worldwide with the exception of the United States.
If the U.S. were to allow the importing of Cuban cigars, and Cuba doubled its production, that would generate enough money to feed every man, woman and child in the country--11.5 million--on an annual basis.
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Gary Heathcott is a retired Arkansas advertising executive who for 30 years has traveled to Cuba, writing and making documentary films. He's worked tirelessly to support the Cuban people and improve relations between the U.S. and Cuba.
Editorial on 09/27/2019